Posting to General Ledger from Purchase Orders

Posting to Job Cost

You can set transactions from Purchase Orders automatically post to General Ledger. The PO to GL Posting Control F/M program contains settings, which determine how to post to GL for PO receipt transactions.

There are standard entries made to General Ledger when posting receipts. For example, when an item is received, one debits the inventory account and credits the receipts account. When the invoice is received for the purchase order, one debits the receipts account (i.e., a wash account), the tax and freight accounts and credits the accounts payable account. You must set up where these standard GL account numbers will come from, what they are, and how they are to be used.

The standard procedure for reconciling Purchase Orders with GL (and the accounts affected) is as follows:

Receipt Register Processing

When you update the Receipt Register in the Purchase Orders module, the system can post a journal entry to General Ledger to debit the inventory account and credit the Receipts account. The invoice receipt GL posting does not take place until the AP Document Entry Register is updated (which is where invoice receipts GL information is carried over). At the time you update the AP Document Entry Register, the system debits the Receipts account (i.e., it is a wash account) along with the tax and freight accounts (if applicable) and credits the accounts payable account.

GL Account Number Structure and Setup

In the PO to GL Posting F/M (POF970) program you enter account number information for postings purchase orders to the general ledger. You must set the department and branch flags, to indicate whether you want the system to insert the department and branch numbers into the GL number when applicable. If you imbed the department and/or branch within the GL account number, the system looks at the department and/or branch assigned to each. For example, if the G/L number to post is 415-00-00 (department is fourth and fifth digits, branch is sixth and seventh digits), the department is 01 and the branch is 02, then the system posts to 415-01-02. The system inserts the department and/or branch in the proper place within the GL account number. You must also set up a default GL account number. Even if the default is not to be used, it must be entered. For each account type, you must select the basis, i.e., to use the default and/or use the account number from the item GL posting table.

Item GL Posting Tables

The following are item GL posting tables. These may be used to set up the basis for some of the account types.

For our example, there are two types of items on the system: dock equipment and warehouse equipment. If dock equipment items and warehouse equipment items are to be posted separately to general ledger, we will set up two GL posting tables; one to assign to dock equipment items and one to assign to warehouse equipment items.